At the end of this month the Judicial Services Commission (JSC) is due to receive the answers to questions it put to John Hlophe, the Judge President of the Cape High Court , about his financial relationship with the Oasis group. If it finds Hlophe's answers unsatisfactory, and possesses the political will to take action, it will have to consider how far it wishes to proceed.
In terms of the South African constitution a "judge may be removed from office" if the JSC finds that judge "guilty of gross misconduct" and "the national assembly calls for that judge to be removed" by a two-thirds majority.
Judge Hlophe's current difficulties date back to November 2000 - the year in which he was appointed judge president - when he joined the board of Oasis's Crescent Retirement Fund on its establishment. The minutes of the first meeting of the directors of the fund, held on November 1 that year, stated that Hlophe had "been nominated" as a member of the board and "had consented so to act."
According to a 2002 company brochure the fund, which was to be managed by Oasis Asset Management, was launched in June 2001. In February 2002 Oasis paid Hlophe R25 000 in "advisory fees". In May 2002 the company began paying him R10 000 a month in "consultancy fees".
The payments to Hlophe's own account tailed off in around May 2003, and from then on they were made into the account of the "Ting Trust" (TNG trust). The monthly sum was increased to R12 500. These payments ran up until May 2005 by which time they had totalled close to a half-a-million rand.
At this point it seems that Hlophe had decided, for some reason, that although he would continue sitting as a trustee of the fund the payments he had been receiving would "be held over" pending an approach to the Minister of Justice, Brigitte Mabandla. In October the minister received a request from Hlophe for permission to be appointed "as a non-Executive Director of Oasis Crescent Property Fund Managers Limited".
It is unlikely that any of this information would have come into the public domain were it not for a defamation action that Oasis Group Holdings brought against Judge Siraj Desai in November 2004.
In 2001 Oasis put in an offer for residential property in the suburb of University Estate in Cape Town, with the intention of having it rezoned so that they could build their head-office there. On November 6 2001 a public meeting was arranged by Oasis, and chaired by the local councillor for the area, in order to canvas the public support of the residents for the rezoning application. At the meeting Judge Desai publicly accused Oasis of using fraud, intimidation, and threats in order to get residents of the area to put their signatures to pro-forma letters supporting the development.
In terms of Section 25 of the Supreme Court Act, no. 59 of 1959 "no summons or subpoena" against a High Court judge "shall in any civil action be issued out of any court except with the consent of the court." On December 14 2001 Oasis's lawyers wrote to Hlophe, as Judge President of the Cape High Court , to request permission to bring a civil action against Judge Desai for the recovery of damages for defamation.
In early April 2002 Oasis's lawyers wrote again to say that they had not yet received a response to this request. On April 25 Hlophe wrote back, apologised for the delay, but stated that "At this stage I am not inclined to grant such permission. Accordingly the application is declined." (On May 8 he received the first of his regular monthly payments from Oasis).
Over the following two-and-a-half years the Oasis lawyers wrote numerous letters to Hlophe requesting reasons for his decision, questioning the basis on which the decision had been made, and asking him to reconsider his refusal to grant permission.
On August 31 2004 the Oasis lawyers, fearing that their client's right to bring a civil action would lapse once three years had passed since the original incident, wrote to Hlophe to request a favourable reply "failing which, we will be compelled to proceed in order to protect our client's interests."
On the 29 October, shortly before the three year period was up, Hlophe wrote back to the Oasis lawyers to say that he had hoped that the "the matter would be resolved amicably" but since it had not been, he would give consent for them to sue Desai.
In early November 2004 Oasis brought their defamation action against Desai, claiming that the remarks he had made in November 2001 were calculated to harm the business reputation of the company, and demanding R250 000 in damages. In March the following year Desai fought back, refusing to admit that "the requisite consent" to sue him was "properly sought or given" and demanded that Oasis prove its claim to the contrary.
The following year Noseweek revealed, in its April 2006 edition, that regular payments had been made by Oasis to Hlophe between April 2002 and March 2003. The magazine noted that Hlophe had "secretly" gone onto Oasis's payroll "after Oasis had got into a legal dispute with his colleague on the bench, Judge Siraj Desai.... Oasis needed the judge president's consent to sue a judge. Hlophe gave it. No wonder Desai is challenging Oasis to prove that Hlophe's permission was ‘properly sought and given'!"
The allegations were explosive because, in terms of the law [PDF], no judge "may, without the consent of the Minister, accept, hold or perform any other office of profit or receive in respect of any service fees, emoluments or other remuneration apart from his or her [judicial] salary." Initially, Hlophe denied Noseweek's claims outright, telling one newspaper on March 30 "I'm not on a retainer from Oasis or anybody. I am not so stupid to receive a retainer from any party".
On March 31 he told Sapa that "I'm not on any retainer." When asked whether he had ever been on a retainer during his tenure as judge president, he replied: "No." On the same day he told Sue Segar of the Witness, "I have said it before, I am denying this." When Segar told him that she had seen a print-out of the Oasis ledgers showing entries made to a J. Hlope, he responded: "I have not seen anything like that myself. I cannot possibly say anything about something I have not seen."
In a long statement issued on April 1 Hlophe seemed to backtrack on these earlier denials. He now stated that, "It is clear from the books of account of Oasis, that remuneration for out-of-pocket expenses had been received." He suggested that former Justice Minister, Dullah Omar, had known about and approved of his relationship with Oasis. He also accused Desai of leaking the information about the payments to Martin Welz, the editor of Noseweek.
Hlophe's claim that he had been paid for "expenses" and that he had received permission from the late Dullah Omar was immediately questioned. It was pointed out that Omar had only served as minister of justice until June 1999 well before the launch of the Crescent Retirement Fund or the start of the payments.
Moreover, it was not clear what the expenses were he was referring to. The fund of which he was a trustee was based at Oasis's offices in Long Street Cape Town, a short walk from the Cape High Court where he worked. Even if he had to drive, his car and petrol were paid for by the government.
In August 2006 the Minister of Justice and Constitutional Development, Bridgette Mabandla, stated - in response to a parliamentary question from the Democratic Alliance - that she "could not find any indication in our system that Judge President Hlophe applied for and/or was given permission by any of my predecessors to perform remunerated work outside his judicial office (before his October 2005 application)."
However, in November 2006 the Judicial Services Commission (JSC) announced that it was not going to act against Hlophe. Hlophe had told them that Dullah Omar had given verbal permission for him take up the position with Oasis, while still minister of justice, and there was "no evidence to contradict" this claim. Apparently, Oasis had refused to provide records of its payments to Hlophe and the JSC did not have the power to compel it to do so.
Hlophe seemed to gain a further reprieve when in April this year the JSC deferred a hearing on various charges made against him by Cape Town advocate Peter Hazell SC, until the Oasis-Desai case had been concluded, at which time all the complaints could be considered. The expectation then was that the case would run for months. However, on May 20 Oasis suddenly announced in advertisements in the Sunday newspapers that they were dropping their claim against Desai.
In January, as part of the discovery process, Oasis had provided to Desai's lawyers details of the payments that had been made to Hlophe. These documents, which were now part of the court record, were passed onto the JSC. In early June Carmel Rickard reported in The Weekender that the JSC had put questions to Hlophe about his relationship with Oasis, which he was required to answer by the end of this month.
The two most serious allegations against Hlophe were, apparently, that he had become financially involved with Oasis without obtaining the consent of the Minister of Justice, as required by law; and, that he had then falsely claimed to have received such permission.
The irony of the whole story is that if Hlophe is to be faulted at all for his decision to grant permission to Oasis to sue Desai, it is that he delayed so long in granting it (and did so only with great reluctance). The intention of section 25 of the Supreme Court Act is to protect judges from harassment by unsuccessful litigants, not to shield them from bona fide civil claims.
Hlophe's relationship with Oasis is problematic for other reasons. Oasis litigates extensively in the Cape high court; and even if he does (did) not hear their cases himself, as Judge President he has the power both to allocate judges and to expedite the hearing of cases. It is for this reason that no justice minister, if properly advised, would have granted him permission to receive this income.